Cultural Differences That Shape the APAC Outsourcing Experience

July 26, 2018

Anna Frazzetto’s article from Forbes.com on July 26, 2018.

The Asia-Pacific region (APAC) is a sprawling, heavily populated and diverse region where many of the world’s businesses choose to outsource information technology (IT) work and business processes. The 2017 ISG Momentum® Market Trends & Insights Geography Report revealed that six out of the top 10 countries worldwide listed on its Delivery Center Maturity Index were Asian. From India and China to emerging outsourcing hotspots like Malaysia, Vietnam and Thailand, APAC countries offer the world bountiful outsourcing options and quite a lot to consider when looking for the right outsourcing destination.

As someone who has worked in IT outsourcing for years, I have spent lots of time on the ground across APAC and seen firsthand how different regions approach outsourcing operationally and culturally. Whether they share borders like Cambodia and Vietnam or there are ocean waters between them like Malaysia and Thailand, each country is unique and that distinctiveness shapes its outsourcing industry. While there isn’t enough space or time here for a detailed exploration of the many outsourcing destinations across Asia’s 48 countries, I can share some key differences for western businesses to keep in mind when looking for the right outsourcing destination in APAC.

Think About Traffic

In many Asian countries, traffic shapes life. When considering outsourcing anywhere in this region, it’s important to think about traffic. In Malaysia and Thailand, for example, businesses cannot expect workers to make it in before 9 a.m. because the traffic congestion on the streets is extremely dense and public transportation is limited. In other countries, including Singapore and Japan, modern, efficient public transportation offsets congestion. Workers can be in earlier.

Check Holiday And Religious Calendars

The calendar of government and religious holidays will look different from country to country. Lunar New Year, for example, is a 15-day event, and different countries will celebrate different days of festivities. In China, Lunar New Year is celebrated on more days and includes many business holidays. Other countries like South Korea and Cambodia celebrate the New Year for shorter durations. For countries with high populations of Muslims, like Indonesia and Malaysia, Ramadan is a sacred month. Business hours of operation and work schedules can be affected over the course of the month.

Some countries are former colonies of western countries and that influence has shaped the modern business environment. India and Singapore are former British colonies and, as such, English is widely spoken and English literacy rates are high. In 2016, the Singaporean Government’s Office of Statistics reported that English was Singapore’s most widely spoken language in the home.

For other countries, the Western influence is cultural. Vietnam, a former French colony, saw its educational system westernized under colonialism, and you can see remnants of colonialism in the architecture, cuisine and infrastructure of the country. In my experience, many Westerners find parts of Vietnamese cities that will remind them of France.

Look At Corporate Hierarchy

Across Asia, countries vary quite a bit when it comes to degrees of hierarchy. In Australia for example, I have run into many organizations with flat organizational structures. Senior directors and testers might work side by side. Other countries, such as Singapore, Japan and South Korea have a more formal, top-down hierarchy that shapes how teams, customers and clients interact.

In the west, we also see various corporate models, cultures and management approaches. Businesses exploring outsourcing in Asia want to be sure to find a partner in an environment that can support the way their business works.

The Role Of Family

It’s important to be pragmatic when considering an outsourcing location. Often times, outsourcing teams have to work long hours, attending late evening meetings to cover calls in the west or putting in long hours to manage a technology issue. Managing tech teams across Asia, I have found there are places where you have to understand the role of the family in order to understand your workers’ schedules and priorities.

Dinner with the family, for example, is a high priority for many workers in Vietnam, Thailand, Malaysia and China. That’s not to say family is unimportant in other locations. However, I have found that family dinnertime is an important ritual that employers in these regions should respect if they want to hold on to talent. It’s not to say that workers won’t come back or join meetings after the family time. Rather, it’s important to ensure workers are able to connect with their families in the ways that reflect their culture and values.

Communication Styles

Cross-global collaboration is challenging, and if the communication channels and styles are misaligned, it can be a recipe for failure. In Australia, workplace cultures are often open and communications do not adhere to strict chains of command. People engage each other without formality at all levels of seniority, which is very different from many Asian workplaces. The Australian style blends well with some Western corporate environments but can also be disorienting to those that work in more structured, formal workplaces or cultures where communications have a stricter protocol.

In some Asia countries, such as China and India, frankness can be seen as rude rather than honest and forthright. Communication in these regions often requires a more nuanced approach to ensure that in the pursuit of openness no one’s status is bruised. Other Asian countries, such as Vietnam and the Philippines, embrace a more direct style of communication. The key is to find a place and partner where communication styles compliment rather than complicate company collaboration.

My advice to any business outsourcing in APAC is to embrace diversity while looking for alignment. Businesses must be chameleon-like as technology disruptions continuously alter the global marketplace. When it comes to outsourcing, embracing that inner chameleon can help. Be open to different cultures, calendars and traditions but also look for places of connection and operational alignment that can help productivity and innovation thrive.